Chain management to minimise waste

The food supply chain is a network of companies that handle food, from the farmer to the retailer. Supply-chain management is a relatively new concept that first appeared in the 1980s in the Japanese motor industry. The Japanese recognised that a business working in a vacuum would find it increasingly challenging to improve its success in increasingly competitive markets. In order to meet consumer needs more efficiently and effectively, a business must work cooperatively with its suppliers and distributors. Although the food industry has been slow to replicate the motor industry's success in optimising chain management, it appears that it is gradually becoming a priority throughout the global food industry.

A fundamental shift in the operation of the food supply chain took place as a result of the Efficient Consumer Response initiative, which originated in the United States (US) grocery industry in 1993 and later spread throughout Europe. Cooperation and coordination replaced adversarial trading relationships, and companies began exchanging strategic and operational information. Food manufacturers that have adopted chain management strategies are reducing production lead times by days, inventory levels by weeks, and new product development cycles by months, resulting in substantially lower costs.

Economic pressures are driving the evolution of the global agri-food chain and promoting greater vertical and horizontal coordination to develop collaborative marketing ventures. By establishing closer partnerships between suppliers at all levels in the chain, it is enhancing the total performance of the entire supply chain and increasing its efficiency and responsiveness.

A crucial factor in supply-chain waste reduction programmes is partnership based on trust between each of the participating members. This differs from the competitive manner in which business is presently conducted and the negotiation of the 'best price' for goods and services provided throughout the supply chain. For that reason, it is vital to obtain a solid union among members of the supply chain and establish a cooperative culture.

Environmental supply-chain management emphasises activities that reduce, reuse, recycle, compost, vermicompost, or substitute materials. To minimise waste, the principles of integration and partnership should be utilised together. Companies in the food processing supply chain must work together using an integrated approach to waste management. A life-cycle approach ought to be applied to the environmental impacts of each product.

The best way to minimise, or eliminate, food waste is to not create it. This may be accomplished by streamlining processes and using resources more efficiently.

Some of the world's top companies are using the following approaches to enhance environmental supply-chain management:

1 A supply-chain integration approach to environmental management links reduction in energy consumption to waste generation.

2 Top management commitment to environmental issues is critical.

3 Employee suggestions must be elicited and rewarded to solve environmental problems.

4 A synergy between a company's environmental image and environmentally sensitive products is imperative.

5 Using life-cycle management and environmental audits improves environmental and operating performance.

6 Setting quantitative targets for different environmental performance measures is valuable.

7 Identifying vendors that can collect, clean, and reship process waste back to the company.

The distribution of cost savings between supply-chain members who undertake waste minimisation practices is difficult to determine as improved efficiencies lead to less product/raw material being purchased. In some ways the inefficiencies of supply chains are promoted by the businesses concerned because it increases their sales volumes.

Despite the barriers to supply-chain cooperation on waste reduction issues, it will probably continue to move forward as the corporate community acknowledges its joint responsibility for the environmental impacts of its products.

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